Restructure Medicare & Medicaid: Economic Factors— Unconstrained Access to Medical Technology Increases Cost of Care... e Researchers generally agree that advances in medical technology have contributed to rising US Health Spending! e Medical technology affects the costs of care through several “mechanisms of action” — New treatments for previously untreatable terminal conditions — Major advances in clinical ability to treat previously untreatable acute conditions — New procedures for discovering and treating secondary diseases — New indications for a treatment over time — Ongoing, incremental improvements in existing capabilities — Major advances or the cumulative effect of incremental gains extending clinical practice to conditions once regarded beyond its boundaries e Very expensive, high-end medical procedures (such as dialysis and heart bypass) — which can easily cost as much as the average annual income of an American — are increasingly 60-70% subsidized by taxpayer dollars. eee cnn eee oN ting, “Medical Innovation Duels Cost Containment," Heath Affairs (Summer 1984) (@)8) www.kpeb.com USA Inc. | What Might a Turnaround Expert Consider? 303 Opportunity for Two Mutually Reinforcing Cycles: Information + Incentives... e More widespread adoption of healthcare information technology, in particular clinical decision support software, should yield better information and provider decisions. — Healthcare is at the cusp of leveraging decision-support technology after historically lagging other industries. — Opportunity to develop best practices to improve patient care and outcomes and reduce medical errors and costs. — More evidence-based care could help to narrow the variation in practice norms — The American Recovery and Reinvestment Act of 2009 provided approximately $19 billion for Medicare and Medicaid Health IT incentives. e Medpac summarizes the opportunities and issues succinctly. — "Drivers of investment in IT include the promise of quality